William Stamps Farish II was a pioneer in East Texas oilfield development, president of Standard Oil and a founding member and president of the American Petroleum Institute. He was a member of the influential Farish family.
Background
He was born in Mayersville, Mississippi, the son of William Stamps Farish and Katherine Maude (Power) Farish. His father, a lawyer, had come from Virginia, where the first Farish in America had settled after emigrating from England in 1730.
Education
Young Farish graduated from St. Thomas Hall in Holly Springs, Miss. , and entered the University of Mississippi, where he took the law course, earning part of his expenses by teaching school. In 1900 he received the LL. B. degree, was admitted to the bar, and entered practice at Clarksdale.
Career
The next year he went to Beaumont, Texas, to look after the oil interests of an English syndicate in which an uncle was an investor. Like scores of other young men attracted to Texas by the discovery of oil at Spindletop in January 1901, Farish soon entered business for himself.
His first venture, a partnership, ended in bankruptcy and the partner's death, but in promptly paying off the firm's debts, Farish established his credit.
Beginning as contract driller and trader in oil-land leases, Blaffer & Farish soon went into the production of oil on its own.
In 1905, in order to concentrate on the Humble oil field, the partners moved to Houston. They also entered into several other ventures, especially in the new oil fields of northern Texas. By 1916 Farish had become one of the leading independent oilmen in Texas. Although successful as a producer of oil, Farish, like other independent oilmen in Texas, had run into serious trouble in 1915.
Under the Texas system of selling their product to major companies under time contracts which specified the price the buyers would pay and the maximum amount they could be required to take, producers who had entered sales contracts early in 1915, when prices were declining sharply, had to sell well below the market prices, which rose dramatically late in the year.
Farish then spearheaded the organization in 1916 of the Gulf Coast Oil Producers Association in order to bring about a concerted attack on the small producers' marketing problems. As the association's president, he tried to arrange to sell directly to refineries in the East in order to bypass the major companies in Texas, but he soon learned that the Eastern refiners required a steady supply in large volume.
To meet this requirement Farish proposed that the producers pool their oil. Failing in this effort, he persuaded several other oil producers, with whom he had had close business and personal relations over the years, to merge their holdings in 1917 in a new corporation, Humble Oil & Refining Company. The new company's immediate objective was to build a large producing business, and Farish, as a director and vice-president, had overall responsibility for production.
Humble expanded rapidly, but its growth potential soon exceeded its capital resources. To raise new capital, Farish negotiated an agreement with the president of Standard Oil Company (New Jersey), Walter C. Teagle, whom he had met while serving on the Petroleum Committee of the wartime Council of National Defense, and in 1919 Humble sold half of its enlarged capital stock to the Eastern company.
Since its dismemberment in 1911 by decision of the United States Supreme Court, Standard Oil Company (New Jersey) had been trying to secure large domestic production of its own. Humble, for its part, gained from the affiliation not only funds for expansion and diversification but also a stable market for its production.
Farish was elected president of Humble Oil in 1922, and over the next decade he guided its growth from a loose aggregation of small producers, whose greatest asset was practical experience, into a complex and well-coordinated organization that relied heavily upon scientific research and utilized advanced engineering techniques.
Although Farish continued to emphasize production, he also promoted diversification and integration, supporting the development of a large pipeline system and the building of several refineries, notably the large and progressive one at Baytown, Texas.
At the same time Humble became a large purchaser of crude oil, daily posting in the fields where it purchased the prices it would pay for oil. Under Farish, the company also built outstanding research and operating organizations, notably in exploration and production.
It thereby not only greatly improved its own search for new oil fields and its production; it also contributed to the advance of the industry's technology. A farsighted executive, Farish early came to see the need for reform in the oil industry's producing practices and for change in the laws governing the production of oil and gas.
Under the "Rule of Capture"--a legal principle that ascribed ownership of oil to anyone who gained possession of it through wells on land he owned or had leased--competing producers tapping a given field had every incentive to drain that field as rapidly as possible, with resultant waste and instability.
Farish left Humble Oil & Refining Company in 1933, with some reluctance, to become chairman of the board of directors of Standard Oil Company (New Jersey). He had served as a director of the company from 1927 and as the board's leading authority on new production concepts and methods and the domestic oil producing industry in general.
In 1942, at the age of sixty-one, he died in Millbrook, New York, of a heart attack, believed by those close to him to have been brought on by wartime strains and overwork.
As research and experience contributed to a better understanding of oil and gas reservoirs, their petroleum content, and the natural forces affecting production, Farish came to support, as the most practical and equitable system of regulation, proration (dividing a field's allowable production among its producers) under state laws in accordance with market demand as estimated by the Federal Bureau of Mines.
An omnivorous reader with a photographic memory, Farish had a broad grasp of the oil industry. His fairness, flexibility, and decisiveness won him the respect and loyalty of his associates but his reserved manner and his uncompromising support of what he considered right sometimes irritated politicians and other outsiders.
Membership
He was a member of the Petroleum Industry War Council, which assisted government agencies in providing the United States and its allies with oil products for war.
Personality
Tall and of a strong physique, he loved the outdoors and found recreation in hunting and riding. Farish was an Episcopalian in church affiliation.
Connections
On June 1, 1911, he married Libbie Randon Rice of Houston. They had two children, William Stamps and Martha Botts.